“¢ Fresh US-China trade war fears underpin JPY’s safe-haven appeal.
“¢ Weaker US bond yields do little to provide any fresh bullish impetus.
The USD/JPY pair lacked any firm direction at the start of a new trading week and seesawed between tepid gains/minor losses around the 112.00 handle.
With investors looking past a batch of upbeat US economic data released on Friday, renewed US-China trade war fears kept investors on the edge and did little to assist the pair to build on last week’s strong up-move.
Reports over the weekend, indicating that the US President Donald Trump wants to move forward with tariffs on $200 billion worth of Chinese imports and the announcement could be made as soon as this Monday.
With global trade tensions back in focus, a fresh wave of global risk-aversion trade was seen benefitting the Japanese Yen’s safe-haven appeal. The global flight to safety was evident from a weaker tone surrounding the US Treasury bond yields, which further collaborated towards capping the pair below the 112.15 supply zone.
Meanwhile, a subdued US Dollar demand did little to influence the price action and the broader market risk sentiment is turning out to be an exclusive driver of the pair’s momentum.
Later during the early North-American session, a relatively thin US economic docket, highlighting the release of Empire State Manufacturing Index will now be looked upon to grab some short-term trading opportunities.
Technical levels to watch
The 112.15-20 region might continue to act as an immediate strong hurdle, above which the pair seems all set to aim towards testing 112.85 supply zone ahead of the 113.00 handle.
On the flip side, any meaningful retracement is likely to find immediate support near the 111.70-65 area, which if broken could drag the pair further towards 50-day SMA support near the 111.35 region.
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